One of the great dangers of unionization is that its influence is not confined to decisions that deal with wages and prices. In order to gain greater leverage in their own negotiations, unions actively support any legal rules that prohibit entry of rivals who threaten to undermine their bargaining position. Free entry is an indirect form of relief that reduces union monopoly power without having to take on the labor statutes that govern union-management relationships.
What should be done with public transit should also apply to public education and other areas. We have to recognize that monopoly power becomes intolerable when protected and sanctioned by legal rules. Our first priority should be to make sure that free entry and exit applies in all labor, service and product markets so that no union, or any other kind of organization, has the power now put into the hands of New York’s Transit Workers Union. Calvin Coolidge had it right. The progressive reformers had it wrong, and now New York City is paying the price for their intellectual confusion and political mistakes.